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Finaxion Research · Stochastic: oversold cross (14, 3) · single stocks · Recomputed 2026-09-10

Does Stochastic: oversold cross (14, 3) work on LII?

Stochastic: oversold cross (14, 3) does not beat buy-and-hold on LII: -3.6 points a year over 27 years.

Total return
×13
Buy and hold
×32
CAGR
10.1%
Sharpe
0.35
Max drawdown
-56.3%
Trades
379
Out of sample
partly
Years
27
1×10×52×20002002200420062008201020122014201620182020202220242026
StrategyLII

Findings

  1. Stochastic: oversold cross (14, 3) does not beat buy-and-hold on LII: -3.6 points a year over 27 years.
  2. Against the S&P 500 over the same window: +1.5 points a year.
  3. Total return ×13 versus ×32 for buy-and-hold, with 379 trades.
  4. The result holds only partly out of sample.
  5. Maximum drawdown -56.3%.
  6. It beats in neither half of the history (split at 2013).
  7. It ranks #17 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact f4bff284709b.

Exactly what was tested

%K(14) crosses above %D(3) in the oversold zone → entry. Held until %K exceeds 80 → exit.

How to read it

The verdict compares the strategy with buying and holding LII over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

Every strategy on LII → · Full page for Stochastic: oversold cross (14, 3) →

How to cite

Finaxion Research (2026). Does Stochastic: oversold cross (14, 3) work on LII?. Daily backtest 1962-01-01–2026-08-31, artifact f4bff284709b. https://finaxion.app/en/research/stochastic-oscillator/lii

Not a recommendation. Past performance does not guarantee future results.